Private Insurers Offering Riders for Basic Standard B1 Integrated Shield Plans

9 Dr Tan Wu Meng asked the Minister for Health (a) whether private insurers can be incentivised to offer riders for basic standard B1 Integrated Shield Plans to cover Singaporeans with pre-existing medical conditions; and (b) whether the Ministry will study the possibility of establishing a reinsurance risk pool across private insurers' basic standard B1 Integrated Shield Plans so as to lower premiums and facilitate extension of coverage to pre-existing medical conditions.

The Minister of State for Health (Mr Chee Hong Tat) (for the Minister for Health): Mdm Speaker, the Ministry of Health's (MOH) focus is to provide affordable basic health insurance to all Singaporeans. This is done through MediShield Life which offers adequate protection for the vast majority of subsidised patients. Its claim limits are sized to fully cover 90% of hospital bills for patients staying in B2 or C class wards. MediShield Life also provides lifelong coverage for Singaporeans with pre-existing conditions. This is made possible by the Government bearing most of the cost of extending MediShield Life coverage to these Singaporeans.

Like all Integrated Shield Plans (IPs), Standard IP is an optional private insurance. Currently, IP insurers are allowed to offer riders for coverage of pre-existing conditions. The premiums for these riders are set by the insurers based on commercial and actuarial considerations. As the Government's focus is on providing basic health insurance for all Singaporeans through MediShield Life, we do not have any plans to incentivise insurers to offer such riders. We have to be prudent in extending subsidies and incentives beyond MediShield Life, as the cost increases will ultimately be borne by taxpayers.

On Dr Tan Wu Meng's suggestion to establish a reinsurance risk pool, MOH will explore this proposal with the industry players. I thank the Member for his suggestion.

Mdm Speaker: Dr Tan Wu Meng.

Dr Tan Wu Meng (Jurong): I thank the Minister of State for his answer. If I may ask three supplementary questions. Firstly, would the Minister of State agree that different pre-existing medical conditions have different implications for risk? Secondly, would the Minister of State agree that in an ideal insurance market, pre-existing conditions will have an incremental price for coverage, rather than the insurer refusing to provide cover at all, which is the case that many of my residents have told me when they sought to obtain additional cover beyond MediShield Life? Thirdly, would the Minister of State give his view on whether the Ministry has a role in preventing market failure within the private healthcare insurance industry?

Mr Chee Hong Tat: Mdm Speaker, I thank the Member for his supplementary questions. For his first question on whether different pre-existing medical conditions will have different risk implications, the answer is yes.

The second question is whether we would look at allowing insurance companies to provide coverage for pre-existing conditions and charge different premiums. I would like to clarify that since MediShield Life was launched on 1 November 2015, we have allowed IP insurers to offer risk-loaded policies where individuals with pre-existing conditions can obtain coverage by paying additional premiums. The premiums will be calculated based on commercial and actuarial considerations, according to the different risks which different pre-existing conditions carry. Importantly, I think it is also useful for us to remember that pre-existing conditions today are already covered by MediShield Life, which is the basic health insurance that we have provided for all Singaporeans, for life.

As for the third question, I think the Member is asking about whether we would look at measures if there is market failure. Certainly, we would study this carefully with the industry and to make sure that the insurance scheme is working well for Singaporeans.